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I have researched this topic everywhere and wherever I go they all have these long explanations that make no sense. This is probably over asked and might get removed but I really want quick and concise explanation

3 thoughts on “How bitcoin and other crypto currencies fluctuate”

If you are asking about the fluctuating relationship between bitcoins and altcoins I was actually recently thinking about that, how closely alts are following bitcoin. One thing I hadn’t appreciated enough is that the major reason alt values move so impossibly inline with BTC is that all major pairs are obviously against BTC. So the USD price coinmarketcap displays is just the going USD rate for the coin’s last BTC trade at the current value of BTC. So say a coin is trading for .001 BTC at $8 a coin, if BTC tanks 50%, the USD value of that coin is instantly worth $4. The USD value really is just a dynamic reference to the going BTC value. It’s kind of obvious, but pretty critical when measuring the value of your trades, and even your assumed losses

So when you take losses or gains you can consider the losses or gains relative to the delta between BTC and alt value, you may find comparatively you aren’t really say 75% down on something but actually like 25% down, with the rest being the decline in BTC value. When you look at it that way you can see how quickly your coins will go up (as they’ve gone down) as both a say 50% increase in BTC and subsequent 25% additional increase in ALT value against BTC will cover a lot of ground quickly.

So if we take that a bit farther to global market cap. If BTC value dips 50% even with only 35% of the market cap, the entire market cap decreases by 50% automatically, even if alts stayed the same value. Because all values are pegged to BTC. Any alt panic sells on top of is just in addition. So even if alts sell off 10% btc value, they still drop by 60% because of that 50% coming from BTC’s drop. Likewise if BTC surges 50% essentially the global market cap including alt coin market caps all surge 50% outside of trading reactions to that event.

Anyone want to correct me on that? I think that logic is pretty sound…